Extending the Classification of European Countries by their IFRS Practices: A Research Note

Abstract

This paper expands the IFRS accounting systems’ classification proposed by Nobes [(2011). IFRS practices and the persistence of accounting system classification. Abacus, 47(3), 267–283] to a broader set of European countries. The results suggest a classification distinguishing between four groups of European countries, and add to the evidence, reported by Kvaal and Nobes [(2010). International differences in IFRS policy choice. Accounting and Business Research, 40(2), 173–187] and Nobes (2011)., that pre-IFRS accounting differences influence the options adopted by firms. This study contributes to the literature suggesting that the widespread adoption of IFRS has not eliminated the differences between national accounting practices and that accounting systems classification did not lose its relevance.

Keywords:

• accounting classifications
• Europe
• IFRS practices

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1 Austria is excluded from the analysis due to the small number of industrial listed firms. Given that Austria generally based its pre-IFRS rules on German law, we believe that the findings are not influenced by the exclusion of this country.

2 Although the EU firms are required to apply IFRS 11 – Joint Arrangements only for periods beginning in 2014, a representative number of firms included in the sample have opted for the early adoption of this new standard. Thus, we decided to eliminate this overt option.